Apple's doing a lot of bragging about their new iPhone 5 camera. Uses a sapphire crystal and has an 8 mp sensor. 3264 x 2448 resolution, f/2.4 aperture all make the camera that much better. Apple has shown some photos taken with the iPhone 5, supposedly untouched.
They've also added the ability to take panorama photos at some 28 megapixels. Wow.
Now you can take pictures while recording. And use FaceTime over cellular (unless AT&T says no).